Proceedings of the IFC-Central Bank of Armenia Workshop in Dilijan, Armenia, 11-12 June 2018
External sector data represent a key element of economic statistics, covering a wide range of topics of interest to statisticians, economists, policymakers and the general public; for instance, to measure the importance of external trade, the role of multinational enterprises (MNEs), the wealth of nations etc. Yet the compilation and use of these data face a number of challenges, such as difficulties in getting information from non-residents, allocating firms’ global operations by country, and establishing common statistical concepts and processes across jurisdictions.
The issues and challenges associated with external sector statistics are continuously evolving, reflecting ongoing economic developments, new data sources and changing analytical requirements. As regards economic developments, a major trend relates to the globalisation of financial systems and value chains in the production of goods and services. This imposes new requirements for data collection and the measurement/estimation of cross-border activities and financial flows. In regard to new data sources, emerging technologies offer various opportunities to improve data collections in both domestic and external areas. Cases in point include the recent emergence of “big data” sources and associated techniques, the increasing integration of micro- and macro-level data sets and the re-use of administrative data sets for statistical purposes. These developments tap a potentially rich vein of previously unused or underused statistics that can be mobilised to present a more comprehensive picture of a country’s international accounts; but they also lead to specific challenges, not least in terms of resources required for handling this new type of information. Lastly, analytical requirements on topics related to external accounts are also evolving. Obviously, the global aspect of the Great Financial Crisis of 2007 09 (GFC) and its spillover across regions have put a premium on the availability of adequate external data to underpin policy analysis by national authorities or international bodies. Indeed, a significant number of the recommendations of the Data Gaps Initiative (DGI) initiated in response to the GFC and endorsed by the G20 relate to the external sector.
In view of the importance of the factors mentioned above, the Irving Fisher Committee on Central Bank Statistics (IFC) and the Central Bank of Armenia (CBA) held a joint workshop on “External Sector Statistics” in June 2018 in Dilijan, Armenia. This event provided a welcome occasion to revisit the current issues related to external sector statistics and the challenges faced by central bank statisticians in finding appropriate sources, compiling indicators, and making use of them. It was also an opportunity to explore new methodological concepts and techniques and revisit global statistical standards, not least to promote greater harmonisation and cooperation in the international statistical community. The event brought together about 45 statisticians and economists who shared their country’s experiences – all these presentations, as referred to in this overview, are included in this IFC Bulletin.
In his opening remarks, Vakhtang Abrahamyan, Deputy Chairman of the CBA, stressed the importance of external sector statistics for policymakers. This was particularly the case for small open economies like Armenia, given the significant influence of international trade on domestic activity and inflation. More generally, and as noted by Aurel Schubert, Director General of Statistics of the European Central Bank (ECB) and Vice-Chair of the IFC, issues relating to external sector statistics have become a key, recurring theme in international forums since the GFC, reflecting in particular a stronger policy focus on external risks and vulnerabilities.
The discussions were organised along six thematic sessions. Session 1 dealt with key issues and challenges in data compilation and discussed various sources and methods used in compiling external statistics. Session 2 focused on quality issues and how different countries deal with data quality improvements, with the presentation of specific use cases. Session 3 explored new data sources and techniques, with a focus on the pros and cons of “big data”. Session 4 highlighted specific measurement problems associated with statistics on balance of payments (BOP) and international investment positions (IIP), while Sessions 5 and 6 focused, respectively, on global interconnections and on the measurement and analysis of external risks and vulnerabilities. A concluding session summarised the main findings.